Kwetu Mikindani PLC wishes to calculate its weighted average cost of capital and the following information relates to the company at the current time: Number of ordinary shares 20 million .Book value at 7% convertible debt TZS 29 million .Book value at 8% bank loan TZS 2 million .Market price of ordinary shares TZS 5.5 per share .Market value of convertible debt TZS 107.11 per TZS100 bond .Equity beta of Kwetu Mikindani PLC 1.2 .Risk-free rate of return 4.7%. Equity risk premium 6.5%. Rate of taxation 30%. Kwetu Mikindani PLC expects share prices to rise in the future at an average rate of 6% per year. The convertible debt can be redeemed at nominal value in eight years’ time, or converted in six years’ time into 15 shares of Kwetu Mikindani PLC per TZS 100 bond.

REQUIRED
Calculate the market value weighted average cost of capital of Kwetu Mikindani PLC. State clearly any assumptions that you make.​